No industry will be watching more closely than Silicon Valley tech firms when President Barack Obama talks Friday about reforms to the National Security Agency's surveillance programs, and no industry has more at stake.

Since the disclosures about NSA spying came out last year, the tech industry has feared an erosion of users' trust, and foreign leaders have threatened to stop using U.S. tech firms' products and services, potentially costing them billions of dollars. Countries like Brazil have even considered creating their own Internet to avoid NSA snooping, threatening to "Balkanize" what's now an open network that allows people around the world to express themselves freely.

"The companies need to hear that the administration is going to balance national security interests with economic and diplomatic interests," said Allan Friedman, a visiting scholar at George Washington University and co-author of "Cybersecurity and Cyberwar: What Everyone Needs to Know."

"The companies' customers need to hear that the U.S. is not going to use its power to exercise undue influence over the global Internet," he added.

The valley wants the president to offer four concrete fixes in key areas:

1. U.S. Data

Much of the debate on NSA activities has focused on the bulk collection of U.S. phone records, where they are stored and for how long.

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But little has been said about the collection of U.S. Internet data. The tech industry is worried about this. For example, the NSA allegedly captures millions of records intercepted from Yahoo (YHOO) and Google (GOOG) data centers, according to disclosures by former NSA contractor Edward Snowden.

Unless there is a clear public threat, the industry argues, such collection of Internet data is excessive and poses a threat to people's privacy. And it wants the president to create limits on when Americans' Internet data can be collected, how long it can be held and when it can be accessed by government officials.

2. Foreign Data

World leaders and overseas Internet users are upset about the collection of data on non-Americans not suspected of spying or terrorism. It is this issue, says Leslie Harris, president and chief executive of the Center for Democracy & Technology, that has hurt tech companies globally. Foreigners distrust U.S. companies that offer cloud computing services, she said, "because people have the sense that data can be accessed without an individualized legal process and on people who have nothing to do with terrorism or spying. ... The companies are going to care a lot (about) new limitations that are put on this kind of data collection."

An advisory panel chosen by the president recommended limiting the data collection to individuals suspected of threatening U.S. national security. The tech industry hopes Obama agrees.

3. Transparency

The Obama administration has made government transparency one of its hallmarks, but the tech companies have fought to be able to tell their users about government requests for user data. The companies argue that the Snowden disclosures have led to a misperception that they are doing the bidding of the U.S. and forking over a huge amount of user data. They have sued the government seeking permission to disclose more about the requests for user data they receive.

The government has since allowed very limited disclosures, but Internet companies want to be able to reveal more detail about these requests to ease concerns their users have about private information. By allowing that, the companies say, the president can not only help them but also signal a new era of transparency and oversight for the entire surveillance program.

4. A privacy czar

The president himself suggested an advocate at the Foreign Intelligence Surveillance Court, which oversees national security matters, to represent privacy and civil liberty issues. Tech firms agree.

Having such an advocate would help both the companies and Internet users, they argue, since as it stands now there isn't an independent advocate for civil rights when the legality of these programs is in front of the court.

Up to this point in the debate, the president has carefully walked the line balancing national security and the economic, diplomatic and civil liberty concerns.

I don't expect him to waver from that position, but I come down on the side of the valley; the president needs to make a sharp departure from past practices that have undermined U.S. tech firms abroad and eroded the strength of the Internet worldwide.

Contact Michelle Quinn at 510-394-4196 and mquinn@mercurynews.com. Follow her at twitter.com/michellequinn.